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Your credit score is a large piece of the puzzle when it comes to qualifying for the best deal on a mortgage, but many people still have questions about how they can ensure the best credit score possible for their circumstances. While the most common advice is to pay off your debts, this is not always possible. What can you do if you are in this situation? Read on to learn a few ways to boost your credit score.

1. Know Which Score Is Checked

Although most people talk about their credit score as one single thing, it is actually one of several scores granted by different agencies and methods. The three major credit-reporting agencies are Experian, TransUnion, and Equifax — which each calculate scores differently. In addition, two methods for scoring, known as FICO and VantageScore, can also be involved.

Find out which agency’s scoring system your mortgage lender uses, then focus on improving that one. Not all lenders, for example, report all information to all three agencies. So the agency your lender uses may have some of your credit information but not all. Improving the information they use means a better score in the area that matters to you.

2. Pay the Right Debts

If you can’t pay off all your debts or can’t even make a big dent in overall debt amounts before shopping for a mortgage, don’t give up on the idea. Instead, focus on paying down one or more debts that will have the biggest impact.

If you have both an installment loan and a revolving credit card account, for instance, freeing up available credit on the revolving debt lowers your debt utilization. This can have a larger impact on improving your credit score than paying off the remaining installment loan. Similarly, paying off a small revolving debt results in a larger percentage of that debt than paying the same amount on a larger debt.

In addition, set a goal of reducing your credit utilization by a manageable percentage at least one month before going mortgage shopping. A drop of just 10% in overall revolving debt could result in real change in your credit score.

3. Leverage Joint Decisions

Are you purchasing a mortgage with your spouse, partner, or someone else? If so, check both borrowers’ scores so you can work jointly for the best outcome. A couple might choose to pool their resources to reduce one party’s debt utilization so that both partners are in the same higher category. You may even discover that it’s better for only one person to be on the mortgage.

You also need to know that negative marks, like late payments or collections actions, aren’t always the same for all borrowers. A borrower with low credit utilization or no missed payments will see a bigger score drop if they miss a payment or take on more debt. The partner with lower credit scores may suffer less from the same black mark. Use this knowledge to ensure that the better score stays high.

Where to Start

Want to know more about boosting your credit scores even though you have to maintain some debt while shopping for a mortgage? Start by consulting with the lending pros at Dominion Capital Mortgage. We work hard to ensure that borrowers have access to loans that work for them and make their new homes attainable.

Dominion Capital Mortgage’s knowledgeable staff will help you prepare for your new mortgage, understand what you can do to be the best candidate possible, and find loan options that fit your circumstances. Call today to make an appointment or learn more.